Effects of chain ownership and private equity financing on quality in the English care home sector: retrospective observational study

Abstract

Abstract Background the structure of care homes markets in England is changing with the emergence of for-profit homes organised in chains and financed by private equity. Previous literature shows for-profit homes were rated lower quality than not-for-profit homes when inspected by the national regulator, but has not considered new forms of financing. Objectives to examine whether financing and organisation of care homes is associated with regulator assessments of quality. Methods retrospective observational study of the Care Quality Commission’s ratings of 10,803 care homes providing services to older people as of January 2020. We used generalised ordered logistic models to assess whether ratings differed between not-for-profit and for-profit homes categorised into three groups: (i) chained ownership, financed by private equity; (ii) chained ownership, not financed by private equity and (iii) independent ownership. We compared Overall and domain (caring, effective, responsive, safe, well-led) ratings adjusted for care home size, age and location. Results all three for-profit ownership types had lower average overall ratings than not-for-profit homes, especially independent (6.8% points (p.p.) more likely rated as ‘Requires Improvement/Inadequate’, 95% CI: 4.7–8.9) and private equity chains (6.6 p.p. more likely rated as ‘Requires Improvement/Inadequate’, 95% CI: 2.9–10.2). Independent homes scored better than private equity chains in the safe, effective and responsive domains but worst in the well-led domain. Discussion private equity financing and independent for-profit ownership are associated with lower quality. The consequences of the changing care homes market structure for quality of services should be monitored.